Straight-line Depreciation : Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below: Depreciation = ( Cost of the asset − Residual value ) Estimated useful life of the asset Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation ) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation: Depreciation = Purchase price × ( 2 Useful life ) To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.
Straight-line Depreciation : Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below: Depreciation = ( Cost of the asset − Residual value ) Estimated useful life of the asset Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation ) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation: Depreciation = Purchase price × ( 2 Useful life ) To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.
Solution Summary: The author explains the double-declining-balance method of depreciation, wherein the book value of the long-term asset is decreased by a fixed rate.
Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.
Chapter 9, Problem 9.4BPR
1(A)
To determine
Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:
Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset
Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation:
Depreciation = Purchase price ×(2Useful life)
To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.
(B)
To determine
the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.
2.
To determine
To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.
3.
To determine
To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.
Hi expert please give me answer general accounting
At the beginning of the month, the Forming Department of Martin
Manufacturing had 23,000 units in Inventory, 40% complete as to
materials, and 20% complete as to conversion. During the month the
department started 73,000 units and transferred 81,500 units to the
next manufacturing department. At the end of the month, the
department had 14,500 units in inventory, 80% complete as to materials
and 60% complete as to conversion. If Martin Manufacturing uses the
weighted average method of process costing, compute the equivalent
units for materials and conversion respectively for the Forming
Department.
a. 93,100 materials; 90,200 conversion
b. 70,100 material; 67,200 conversion
c. 68,400 materials; 77,600 conversion
d. 83,900 materials; 90,200 conversion
e. 83,900 materials; 85,600 conversion
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